1. Field of the Invention
The present invention relates generally to determining and tracking a relative value, such as the net present value, of services provided by medical practitioners and staff. More particularly, the present invention relates to coordinating and tracking medical services and related information, and evaluating managed care organization payment patterns for medical services to reduce medical practitioner losses from unpaid, partial-paid and late-paid services. The invention is an integral part of an overall process of providing medical services designed to minimize costs, and restructure medical offices to take advantage of information technologies, wireless systems, local area networks, wide area networks, and the Internet to reduce operating costs and maximize efficiency. The invention also relates to methods and apparatus for streamlining medical practices to more efficiently serve patients and improve physician profitability.
2. State of the Art
The conventional practice of medicine is the result of centuries of improvements in medical technology. Yet, even as medical technologies have improved, the foundation of the medical practice has remained the same. Patients schedule an appointment, are greeted when they arrive for their appointment, and then meet with one or more physicians or other medical services providers. Medical services providers evaluate each patient, diagnose any problems, and recommend tests, prescriptions and other medical procedures as necessary. The patient is then charged for the medical services provided.
Another recent aspect of medical practice relates to medical services providers' relationships with insurance companies, medical managed care organizations or other third party payors (“TPPs”). As used herein, the term “TPP” is intended to include any organization through which one or more patients receive medical services to be billed through a common payment manager which may pay all or a portion of the charges to a medical practice or facility. Examples of TPPs include, but are not limited to, insurance companies, health maintenance organizations (“HMOs”), physician-hospital organizations (“PHOs”), managed services organizations (“MSOs”), preferred provider organization (“PPOs”), various physician alliances, physician-hospital and physician-medical facility agreements, and Medicare, Medicaid or other indigent, uninsured or under-insured payor supplement organizations.
A TPP may enter into separate or joint agreements with physicians and other medical services providers. Then, through agreements with patients in exchange for risk-adjusted paid premiums to the TPP, the TPP pays all or part of a patient's medical expenses. The level of care (i.e. type of service, access to service, duration of service, type and amount of medication, etc.) is adjusted by the TPP to set premiums and determine profitability. Medical services providers, based on their agreements with a particular TPP, agree to charge no more than a specified rate for each type of medical service provided according to a predetermined fee schedule. In exchange for agreeing to the predetermined fee schedule, medical services providers are placed on the TPP's list of preferred providers, or some other list which may determine what portion of the allowable fees the TPP will pay and what, if any, portion of the allowable fees the patient will pay. Other TPPs may agree to pay for all or a portion of medical services regardless of which medical services provider the patient visits. As used herein, the term “medical services provider” is intended to include one or more medical practitioners of any medical field or specialty which may have an opportunity to bill for medical services provided through a TPP. The term “medical services provider” specifically includes, but is not limited to, physicians in any medical field or specialty, nurses, medical assistants and other medical staff such as medical administration and counseling, and any offices, groups or groups of associated offices employing one or more physicians, independent medical contractors, nursing facilities, long and short-term care facilities, off-site providers (home care providers), occupational and physical therapists, behavioral health providers and ambulatory care facilities.
TPPs are formed as for profit businesses and generate profits from coordinating the delivery of medical care and there are benefits to medical service providers who sign agreements with TPPs. Particularly in more recent years, however, medical services providers who charge for services through TPPs have experienced problems.
One of the problems experienced by medical services providers is that TPPs have intentionally rationed parts of the health care delivery system to minimize costs and maximize profit. Examples of TPP rationing include: limiting allowable services, limiting access to medical care, increasing patient premiums, increasing the patient responsibility portion of medical costs, reducing allowable fees for providing medical services, increasing physician liability, decreasing, delaying or refusing payment to medical services providers, and driving up the costs of medical services providers who attempt to claim outstanding unpaid or partially paid claims. These “adjustments” to the process of compensating medical services has the net effect of reducing physician income. The United States Consumer Price Index (CPI) has steadily increased at the rate of 2% to 3% per year since 1994. Nevertheless, physician net income has steadily decreased from a 2.4% increase in 1994 to a 5.8% decrease in 1997. Studies show that physicians are working longer hours, face increasing liability, and have experienced a significant drop in job satisfaction.
Attempts have been made to increase provider income by streamlining medical practices through medical management systems. FIG. 1 illustrates a flow diagram of a conventional medical services process such as that employed by a medical services provider dealing with a TPP. For many TPP plans, prior to visiting a specialist, a referral from a primary care practitioner is required. The primary care physician must request permission for a referral from the TPP. The TPP must then issue a formal approval for a referral to the requesting physician/service provider. The authorization must also be in the specialists' office prior to a patient's visit to the specialist. Many authorizations state that the TPP's approval does not guarantee payment. Without the formal approval, however, no payment will be made to the specialist for medical services provided. More than 98% of referral requests are eventually approved, but the wait to obtain an approval may extend several weeks. The result of such approval requirements may significantly delay the delivery of health care, potentially harm the patient, and delay compensation for the medical services provided.
With a proper referral 2, if required, authorization 4 from the TPP for the medical services requested must be obtained. Conventionally, authorization 4 is accomplished by a medical services provider staff member contacting the TPP by phone or facsimile to exchange information regarding a patient requesting medical services. The exchanged information typically includes such information as the TPP plan with which the patient is associated, the type of services requested, and the name of the medical services provider who will provide the services. The TPP may refuse authorization or automatically authorize specified services, such as routine physician visits, based on the contract terms.
Once authorization 4 is granted, or in conjunction therewith, a patient's demographics 6 are recorded in the patient's records. To record a patient's demographics, conventionally, a patient completes a form including such information as the patient's name, addresses, relevant numbers, guarantor, employer or TPP information, summary of medical history, allergies, and the like. Once all or part of a patient's demographics are recorded 6, or in conjunction therewith, the patient is scheduled 8 for an appointment. The decision of when to schedule a patient for an appointment conventionally involves such factors as: the type of services requested, medical services provider availability, medical office resources availability and patient condition urgency. After an appointment is scheduled 8, the patient's relevant medical records are retrieved 10 prior to the patient's appointment.
At the time of the patient's appointment, the patient is welcomed by medical office staff and signs-in 12. Sign-in 12 signals to the medical staff that the patient has arrived, and typically also involves collecting a co-pay amount from the patient. The exact amount of the co-pay, whatever it may be, must be determined and collected prior to providing medical services. Co-pay amounts vary considerably and can fluctuate without warning. Sign-in 12, however, may also involve a more detailed record by the patient of the patient's medical history, a description of symptoms, or other patient demographics as needed. Various medical services providers request and retrieve different information from patients at different times throughout the process of providing medical services. When a patient's turn to be seen has arrived, the patient is conventionally greeted by a nurse or medical assistant who confirms basic patient information such as name, address, insurer and purpose of visit, and prepares the patient to be seen by the primary medical services provider, such as a physician or a nurse practitioner, for example by checking the patient's weight, blood pressure, pulse, medications, etc.
The patient is then seen by a primary medical services provider 16, such as a physician, who evaluates the present complaints of the patient or otherwise responds to the purpose for the patient visit, such as by performing a routine physical, the primary medical services provider diagnoses any problems found during the examination, recommends any treatment for problems found, prescribes any medications, procedures, tests, surgery, or the like, and explains the patient's condition to the patient. Either simultaneously with or subsequent to meeting with the patient, the primary medical services provider either dictates for later transcription, or otherwise records a report to the file describing the examination, diagnosis, recommendations for treatment, prescriptions and the like. A copy of the report is generated, signed and sent to the referring entity as well as being filed in the patient's records.
Following the patient's visit, the medical services provider bills 18 the patient, either directly or through the patient's TPP. Completed medical services are typically “checked-off” on a printed form and sent to a data entry clerk to enter diagnoses, codes and “list” prices into the existing office accounting system. Charges are forwarded to the TPP at the billing clerk's convenience. Once the TPP receives the charges, they are reviewed and eventually paid according to the rules and policies of the TPP who may pay according to their fee schedules on a time frame based on their cash flow requirements. Each office independently verifies payment accuracy and follows-up on late payments or non-payments. Gross charges are posted to a traditional accounts receivable system. Payments, discounts and write-offs are entered as received in the “explanation of benefits.” The operation of medical services providers, including the details of the process as illustrated in FIG. 1, is well known to those of ordinary skill in the art.
One example of a company which provides computer systems to assist in managing medical services is Datamedic Corporation of Massachusetts. Datamedic offers software/hardware packages for patient scheduling, billing, claims processing and collections. In particular, Datamedic's PMstation system operates from the medical services provider's in-house computer server and may be used in any Windows®-based system. The PMstation system assists in coordinating multiple resources for a single patient visit such as a physician, nurse, examination room, examining instruments, etc. Datamedic also sells CHARTnote and CHARTstation systems which integrate with the PMstation system to store codified data directly into a local patient database to eliminate the need to separately transcribe and record the information into the patient's file, to reduce paper records, and to more easily access patient records. The CHARTstation system also includes features such as: an autofax to immediately send a letter or report to a referring clinician, a full history of a patient's prior visits, allergies and laboratory results, patient record database search and electronic prescription writing capabilities, risk management alerts such as drug-to-drug and drug allergy warnings and automatic TPP codings for payment. The Datamedic systems may be accessed from any Windows NT/95 computer, including handheld, pen-based computers such as those from Fujitsu and Mitsubishi.
Another medical management computer system sold to medical services providers is that distributed by QuadraMED of San Rafael, Calif. The QuadraMED Affinity system focuses on centralizing clinical and financial data by providing a database of patient management information such as insurer, age, gender, contact information, visit schedules and chart location. The database of patient management information is centralized by providing access to it through the Internet via a secured Web browser, allowing medical services providers to retrieve real-time patient management information from any location with a connection to the Internet. The QuadraMED system also manages financial and clinical information and attempts to increase practice profitability by checking for and reducing redundant data entry and generating summary and detailed management reports on practice efficiency.
Yet another medical management computer system sold to medical services providers is that distributed by Healtheon/WebMD of Atlanta, Ga. The Healtheon/WebMD system integrates numerous sub-systems which include sub-systems to confirm and process referrals and authorization, submit and track insurance claims for collecting, order and check laboratory tests, distribute text-based and administration information across email, fax, mail, and retrieve patient information from a common patient database. One sub-system of the Healtheon/WebMD system permits medical services providers to access medical dictionaries, encyclopedias, databases and other literature electronically for research purposes. Another sub-system permits medical services providers to select a lab test, confirm patient eligibility based on insurance coverage and then submit the test request electronically. Medical services providers may also access individual completed test results through the Internet. Yet another sub-system of the Healtheon/WebMD system permits a medical services provider to generate medication prescriptions and refill medication prescriptions electronically. The prescription sub-system also provides a patient's medication history, drug reference information, clinical alerts and drug-drug interactions to both authorized medical services providers and to patients.
The Healtheon/WebMD system is a transaction-based system that improves the transfer and storage of data through the Internet. It does not specifically address physician cost/profitability, although it does speed-up many labor intensive transactions to make the physician and other health care entities more efficient.
Conventional medical management systems presently sold focus on accepting patient demographics, scheduling patient visits, and creating charges and submitting them to a TPP or other payor. While a number of systems are available, most concentrate on a traditional accounts receivable system. These systems do not attempt to track TPP payments, nor do they assist in more efficient time management based on a value of the medical services provided against the resources required to deliver those services.
Fee schedules may be provided by an insurer. Such fee schedules are independently produced by TPPs and may or may not be linked to “official” Medicare or other fee schedules. More importantly, however, the allowable fee schedule amounts have very little, if anything, to do with the actual value of the promise of future payment by a particular TPP to a medical services provider. Because each TPP has a different method, timing, and strategy for payment, has a different financial strength behind the promise of payment, and has a different risk of becoming insolvent before providing payment, each TPP's promise for payment does not actually have the same practical value.
A.M. Best Company of Oldwick, N.J., generates an annual listing of its ratings of insurance companies, each insurance company in the list having assigned thereto a rating based upon A.M. Best Company's opinion of the financial strength of each company and its ability to meet its financial obligations as of the date of the listing. Not all companies are listed, however, and the listings do not provide an indication of the payment methods and strategies employed by the insurance companies or rankings for those insurance companies who have requested their rankings not be listed. Furthermore, the A.M. Best Company's listing does not provide an indication of the future likelihood of payment, or whether the insurance company has a worsening cash flow at any point after the annual data is collected.
For many patients associated with TPPs, there is a patient co-pay required at the time of a visit with a medical services provider. The co-pay amount may be only $10 or $20, but for a medical services provider with several physicians, there may be a large amount of co-pay money at the end of a day. One problem sometimes experienced by medical services providers is employees stealing the co-pay money rather than placing it in the account where it belongs. To avoid being caught, the employees may adjust the data entry records to indicate that they money was paid and accounted for at a different time so that a daily accounting will not reveal the missing money. Eventually, the fact that money is missing may become apparent, but by that time it may be difficult to determine who made the changes, a significant amount of money may have been stolen, and the money may already be spent and practically uncollectable. Another problem sometimes experienced by medical services providers is employees mis-stating their hours worked. When medical employees work at less than ideal efficiency and/or mis-state hours worked, physician profits are affected and unnecessary staffing adjustments may be made to accommodate the sharply increased work-load created by managed care. Appropriate staffing levels for the workload, accurate time keeping and employee accountability must be maintained to control medical costs. Medical facility loss due to employee theft of time, supplies, and the like is commonly called “shrinkage.”
Additionally, conventional medical management systems still include many redundant activities which may be improved upon to enable medical practitioners to more efficiently and effectively treat patients. Therefore, it is desirable to have a medical management system which intelligently schedules patient visits and evaluates the efficiency of a medical practice based on a more reliable measurement of the value of the patient's method of payment. It is further desirable to simplify medical practice activities to increase efficiency and decrease fraud losses and, therefore, increase profits for medical practitioners.